The Bangko Sentral ng Pilipinas (BSP) reported that the country’s Balance of Payments (BOP) position registered a deficit of US$827 million for December 2025. This monthly figure brings the cumulative full-year BOP position to a deficit of US$5.7 billion for 2025.
The BOP represents the net sum of all economic transactions between the Philippines and the rest of the world. A deficit indicates that more foreign currency left the country than entered it during the specified period, often driven by trade imbalances or fluctuations in foreign investments.
Despite the year-end deficit, the Philippines maintains a formidable defense against external economic shocks. The country’s Gross International Reserves (GIR) stood at US$110.8 billion as of end-December 2025.
The BSP highlights that this reserve level serves as a “substantial external liquidity buffer,” ensuring the Philippines can meet its international obligations and stabilize the local currency if necessary.
Key metrics of the current GIR level include:
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Import Cover: The reserves are equivalent to 7.4 months’ worth of imports of goods and payments for services and primary income. This exceeds the international benchmark of three months.
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Debt Adequacy: The GIR covers approximately 3.9 times the country’s short-term external debt based on residual maturity.
The GIR is composed of foreign-denominated securities, foreign exchange, gold, and other highly liquid assets. These reserves perform several critical functions for the Philippine economy:
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Ensuring Liquidity: Guarantees available US dollars to pay for essential imports and service foreign debt.
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Currency Stability: Allows the BSP to manage excessive volatility in the Philippine Peso exchange rate.
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Economic Resilience: Provides a cushion that protects the domestic economy from sudden shifts in the global financial landscape.
The BSP remains committed to monitoring international and domestic developments to ensure that the Philippines maintains a sustainable external position throughout 2026.
